Microfinance Initiatives: Social Performance Audit Tool

Social Performance Audit Tool

The USAID social audit tool uses a "process auditing" approach to assess social performance that evaluates the MFI in reference to its stated social mission. It answers the following question: To what degree do the internal processes promote fulfillment, or lack of fulfillment, of the MFI's stated social mission? Process auditing involves an in-depth assessment of six internal processes critical to the MFI's social performance:

1. mission statement and management leadership,
2. hiring and training,
3. incentive systems,
4. monitoring systems,
5. customer service, and
6. strategic planning.

The USAID social audit also assesses the MFI's performance in relation to its corporate social responsibility, particularly in terms of its relationship with and impact on staff, clients, the local community, and the environment. The USAID social audit further includes a review and evaluation of the MFI's social accounts. To the extent the MFI has produced social accounts (information on social performance), auditors will evaluate the quality and materiality of the social accounts and describe their implications for the MFI's overall social performance in the final social audit report.

The USAID social audit can be used as a self-assessment tool linked to an internal audit function or used by external parties to conduct objective assessments, including management processes assessments for a social rating.

For more information contact Gary Woller at gary@wollerassociate.com.